Mortgage Fraud

41 Charged as Mortgage Fraud Hits Condos & Suburbs
Wednesday, June 24, 2009 5:51 PM

Federal law enforcement officials recently announced charges have brought against 41 defendants in five separate cases in Chicago. The cases involve more than $48 million in fraudulently obtained mortgages for dilapidated homes in urban areas as well as deals involving million dollar condominiums in a Chicago high-rise and sprawling homes in affluent suburbs like Wheaton and Glenview. The vice president of a title company, mortgage brokers, loan officers, appraisers, real estate investors and an attorney are among the 37 defendants charged.

“Mortgage fraud is a serious issue that affects not just financial institutions but ordinary citizens who may have invested in such financial institutions or who hope to purchase, sell or refinance a home by honestly setting forth their finances. Today’s charges also show that the mortgage fraud issue affects suburbs as well as cities,” said Patrick J. Fitzgerald, United States Attorney for the Northern District of Illinois, who announced the charges along with Robert D. Grant, Special Agent-in-Charge of the Chicago Division of the FBI and Barry McLaughlin, Special Agent-in-Charge of the U.S. Department of Housing and Urban Development (HUD) Office of Inspector General in Chicago.

Among the cases are:


* U.S. v. Lisnek, et al. is one of the most comprehensive mortgage fraud schemes ever charged in Chicago. The 22-count indictment names 19 defendants, including LaSalle Title Company and three other businesses, who allegedly schemed to fraudulently obtain loans totaling more than $10 million on 70 residential properties in Chicago, including many blighted homes on the city’s South Side between 2002 and 2007. The resulting losses by various mortgage lenders totaled approximately $5.8 million.

* The 23-count indictment returned in U.S. v Askar, et al. names 10 defendants accused of scheming to fraudulently obtain loans totaling more than $17.2 million on various multi-million-dollar condominiums and penthouses at 33 West Ontario St., also known as Millenium Centre. Between July 2004 and December 2006 the co-defendents are alleged to have fraudulently obtaining more than $17.2 million in loans to purchase nine Millenium Centre units.

* Six defendants accused of fraud and using stolen or fictitious identities to fraudulently obtain approximately $3 million in home loans from various lenders by submitting false applications for loans in U.S. v. Okulaja, et al.

* In another $3 million mortgage fraud scheme, the nine-count indictment in U.S. v. Beck, et al. alleges six defendants were purported to be in the business of buying, repairing and reselling real estate.

* U.S. v. Luckett charges the chief executive of a Burr Ridge mortgage lender who allegedly defrauded GMAC Bank out of approximately $15 million in funding more than 450 fictitious residential loans.


All the charges filed in these cases are felonies. They carry a variety of maximum penalties including 30 years in prison and a $1 million fine on each count of mail and wire fraud affecting a financial institution or 20 years in prison and a $250,000 fine if no financial institution was affected. Alternatively, the court may impose a maximum fine totaling twice the gain to any defendant or twice the loss to any victim, whichever is greater. If convicted, the four business entities charged each face a maximum penalty of five years probation and a $500,000 fine.

“People who would want to commit this crime should understand there’s a lot of attention being focused on it, and we’d like to think that we have our ears up,” Fitzgerald told the Chicago Tribune.